The series on misleading on fair dealing continues with a post on transactional licensing and Access Copyright’s inexplicable opposition to a licensing system that currently generates millions of dollars in revenue for publishers and authors. Transactional licensing, which involves pay-per-use licences for specific uses not otherwise covered by institutional site licences, collective licences, or fair dealing, is widely used to ensure universities and colleges are compliant with copyright law (prior posts in the series include the legal effect of the 2012 reforms, the wildly exaggerated suggestion of 600 million uncompensated copies each year, the decline of books in coursepacks, the gradual abandonment of print coursepacks, the huge growth of e-book licensing, why site licences offer better value than the Access Copyright licence, my opening remarks to the Standing Committee on Canadian Heritage).

The Industry committee has heard convincing evidence that expenditures by Canadian education on transactional licences collectively runs into the millions of dollars each year. For example:

• the University of Toronto said it paid more than $285,000 on transactional licences in the last academic year
• Ryerson University said it spends more than $150,000 on transactional licences annually
• the University of Guelph spent $100,000 on transactional licences in 2017-18. Transactional licences are responsible for 6 per cent of course materials at the university. Site licensing covers 54 per cent of the content, free and open Internet content constitutes 24 per cent, and fair dealing 16 per cent.
• Concordia University, which pays the Copibec collective licence, still spends an additional $120,000 in transactional licensing costs
• the University of Calgary spent $96,149 on transactional licences, of which $45,123 went toward materials in printed coursepacks and $51,026 for materials posted to a CMS.
• UBC spent $113,409 on transactional licences for access and use of 780 items

The significant expenditures on transactional licences is notable for several reasons. First, they provide compelling evidence that claims educational institutions treat fair dealing as free dealing is simply false. Universities spend millions of dollars on these licences each year precisely because there are reasonable limits to fair dealing. Contrary to the claims, universities regularly turn to licences for materials where fair dealing does not apply.

Second, additional transactional licences may be needed even where a collective licence is operational. While Access Copyright and Copibec leave the impression that their licences provide a one-stop solution for educational copying, their licences do not permit unlimited copying. Given their commitment to abiding by the law, universities subject to collective licences still find themselves investing in transactional licences to cover their copying needs.

Third, transactional licences are more effective than collective licences in directly compensating creators and publishers for the use of their work. Unlike the Access Copyright licence, which involve considerable guesswork on usage and a Payback system that excludes digital materials as well as works older than 20 years, transactional licences are paid for use of a specific work regardless of the format or age. The costs currently reflect market rates and feature a link between copyright compensation and creativity not found in a collective licence.

Fourth, Access Copyright has astonishingly opposed transactional licences for years, arguing that only its licence is an effective means of compensation. In 2016, the Copyright Board raised several questions about the possibility of establishing a tariff for transactional licensing, effectively creating a standard per page fee for transactional usage. Despite widespread usage by educational institutions and adoption by publishers, Access Copyright responded (Document AC-18):

Transactional licences for secondary uses of works fail to deal with the realities presented by digital copying in the educational sector and do not ensure that rightsholders are compensated when required.

Oddly, Access Copyright told the Copyright Board that transactional licences simply can’t be used for CMS:

Whereas students buy paper coursepacks from their institutions, bookstores, and copyshops, which can charge and recoup the per-page royalty fee at the point of sale, there is no point of sale when a digital copy is made by a professor and placed on a CMS or accessed by a student. There is nowhere for the royalty to be charged and collected.

In fact, Canadian universities are already using transactional licences for these purposes, supported by publishers and others granting licences in the market. For example, the U.S.-based Copyright Clearance Center (CCC), Access Copyright’s U.S. counterpart, offers transactional licences and has been used by Canadian universities. The CCC has then remitted the royalties it collects to Access Copyright. Yet despite its success in the market and the millions being spent annually, Access Copyright remains opposed, suggesting that its primary interest is preserving its licence approach, not adapting to emerging opportunities in support of all stakeholders.